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Exploring the Software Use Terms for Windows Enterprise Edition

The extended functionality of Windows Enterprise Edition as an extended software use right, derived from procurement of Software Assurance (SA) is often leveraged by organisations who have committed a Microsoft relational procurement contract like an Enterprise Agreement (commonly referred to as ‘EA’).

The software use terms to access the extended functionality available within Windows Enterprise are critical when evaluating the risk of contract expiration and non renewal of maintenance (Software Assurance)

Understanding whether there is a vendor obligation to deploy prior to expiration of the SA maintenance contract, a continuing right to deploy following expiration, and the ability to re-image replacement devices are critical, and not commonly explored, to assess the impact of allowing maintenance (SA) on Windows to expire.

Microsoft has created a powerful commercial mechanism to drive certain corporate purchasing behaviours within Software Assurance (SA) and define it under an umbrella description as “offering that provides benefits that may include new version rights, access to differentiated technologies, additional use rights for the Products for which it is acquired, spread payments, consulting services, training, support and access to exclusive offerings”.

This article will explore the publicly available information on the conditions and limitations of the extended functionality of Windows Enterprise Edition as an extended software use right derived from Software Assurance (SA), referencing binding documentation like the Product List and Product Use Rights and other non-binding advisory publicly available documentation for comparison.

While many organisations and resellers refer to New Version Rights as a principal and critical component of the maintenance relationship, this is not always the primary driver for maintaining a relational contract with Software Assurance (SA) for your product portfolio.

For reference, Microsoft explain that New Version Rightsenable access to certain perpetual rightsto new version releases over the maintenance contract term:

“With Software Assurance, customers are eligible to upgrade to new versions of licensed software made available during their term of Software Assurance coverage. New Version Rights means, for any underlying licensed product for which Software Assurance coverage is ordered, the right to upgrade to, and run in place of the underlying licensed product, the latest version of that product that we make available during the covered period. For example, if a new version of Microsoft Office is made available during the term of your coverage, your licenses will automatically be upgraded to the new version. Customers that acquire perpetual licenses through Software Assurance can deploy the upgrades after their coverage has expired.

[Ref: Product List, June 2013, Page 62 of 189]

For example, An organisations that procured Windows 7 Pro on a perpetual Volume Agreement after General Availability (October 2009) and maintained Software Assurance (SA) for Windows after General Availability of Windows 8 (October 2012) will have perpetual use rights to Windows 8 Pro.

Windows Enterprise Edition is not accrued under New Version Rights as it is an ‘Edition’ of Windows and not a new ‘Version’ (like say ‘Windows 9’).This distinction that the software use terms for Windows Enterprise Edition are derived as a product specific benefit of Software Assurance and not from New Version Rights specifically, could be material in determining the rights and limitations of the software use grant.

Expiration of Software Assurance

Microsoft initially advise in the Product List that Software Assurance enables the software use rights to Windows Enterprise Edition (see extract below) and like all contractually binding documentation, the vendor is careful to stipulate the conditions and limitations of that use within the overarching umbrella of Software Assurance.

“[…] Customers with active Software Assurance coverage for the Windows desktop operating system are eligible for this benefit. Software Assurance coverage for the Windows desktop operating system on a licensed device gives customers the option to use Windows 8 Enterprise in place of Windows 8 Pro on that device.

Eligible Software Assurance customers have the rights to use Windows 8 Enterprise as described in the Product Use Rights. Customers may not move Windows 8 Enterprise from the licensed device to another device, except in conjunction with the permitted reassignment of their Software Assurance coverage.”

Importantly, (see above) Microsoft are careful to stipulate in theProduct List that Windows Enterprise Edition cannot be reassigned to a replacement device without Software Assurance “coverage”.

The ultimate impact to the an organisation will be dependent on the current hardware lifecycle and the necessity to maintain a consistent corporate image, or critical requirement to access the extended functionality of Windows Enterprise. The ongoing procurement of SA under a relational procurement contract like a Enterprise Agreement (EA) or Enterprise Agreement Subscription (EAS) provides an incentivised price point that must be weighed against the cost of ad hoc procurement of Software Assurance (SA) on transactional procurement model(s). The implications of non-renewal should include evaluation of the functional limitations of perpetual use rights without access to the extended portfolio of benefits commitment to Software Assurance includes.

The Influence of Advisory Documentation

Microsoft subsidiaries and other industry experts will often refer to advisory documentation and trusted 3rd party commentators to initially assess the rights (and limitations) of software use terms for Microsoft Software.

Microsoft guidance documentation include the following advice on the limitations and conditions of use for Windows 8 Enterprise Edition:

“When you license a device with Software Assurance, the SA benefits for that device are available for the term of the Software Assurance coverage only. Note, when acquired under a non-subscription license, Windows 8 Enterprise use rights are perpetual for the licensed deviceeven after Software Assurance coverage endsas long as Windows 8 Enterprisewas installed on the device at the time Software Assurance coverage ends. Perpetual use rights for Enterprise Edition are tied to the licensed device and end once the device is retired.”

This is an interesting statement, and therefore under this logic, a customer licensed with Windows 7 Professional with active Software Assurance (SA) that expired on 31st October 2012 would have the following rights:

Can assign and deploy Windows 7 Enterprise Edition until the end of their Software Assurance (SA) coverage.

Can deploy Windows 8 Pro in December (after expiration) using the benefit of “New Version Rights”.

Microsoft advisory documentation via the Microsoft Virtual Academy iterates that there is a perpetual right for the “licensed device” following expiration of SA, but interestingly does not explicitly reference an obligation to install.

“Enterprise Edition use rights are perpetual for the licensed device even after SA coverage ends”

*For the vendor definition: “Licensed Device means the single physical hardware system to which a license is assigned”. [Ref: Microsoft Product Use Rights, April 2013, Universal License Terms, Page 7]

Trusted 3rd party commentator Gartner provide the following guidance that appears to disagree on the requirement to install.

Gartner states that Windows Enterprise is not derived under an SA benefit (as suggested by the Windows 8 Licensing Guide).

Gartner define SA benefits – Use Rights as “features and functions that are not part of Windows Enterprise and don’t include perpetual use rights. They may only be used while Windows SA is in force on a particular device. If SA is not renewed, then the organization/user must stop using these features”

Gartner appears to advise that Windows Enterprise Edition is instead accrued under New Version Rights “SA conveys rights to new versions of the covered product.” […] “The Windows upgrade (and Windows Enterprise) may be installed and run on a PC that was covered by SA, even after SA expires. However, it cannot be moved to a replacement PC if the new PC was never covered by SA.”

Microsoft do provide ‘some’ guidance on their Volume Licensing Website on re-assignment rights after expiration but do not address the requirement to install:

“I purchased Software Assurance (SA) for Windows, giving me the right to upgrade to Windows 8 Enterprise edition. Can I reassign that operating system license to another PC and use Windows 8 Enterprise Edition on it?

No. You may not move Windows 8 Enterprise from a licensed device to another device. However, you may reassignactiveSoftware Assurance coverage to a replacement device internally, so long as (1) the replacement computer is licensed to run the latest version of that operating system, and (2) you remove any desktop operating system upgrades from the original computer, as permitted under your Volume Licensing agreement.

If you are eligible for perpetual licenses under your Volume Licensing agreement, you can continue using Windows 8 Enterprise on a PCeven after your Software Assurance coverage has expiredfor that device. However, Windows 8 Virtualization Rights benefits of Software Assurance expire when Software Assurance coverage expires. Learn more about Windows 8 Enterprise licensing.”

The Microsoft Website seems to support other advisory documentation that procurement of Windows Pro under a perpetual Volume Agreement with Software Assurance (SA) will provide perpetual use rights to Windows Enterprise for the last assigned device prior to expiration.

It should be noted that advisory documentation (likely for simplicity) rarely refer to source ‘binding’ documentation like the Product List or Product Use Rights and increasingly, it should be recognised that licensing briefs, white papers and training resources, and 3rd party commentators, while useful, are not contractually binding documentation. While often quoted by the Microsoft subsidiary to support their own view, when it comes down to it, the customer must look to the ‘binding’ terms and extrapolate how this should be implemented and controlled (from the vendor perspective). Non-binding advisory documentation is of limited influence unless it supports the view of the vendor.

The Hierarchy of the Product Use Rights

Microsoft advisory documentation rarely refers to ‘binding’ documentation like the Product List or Product Use Rights that are the primary resource for Microsoft Volume Licensing customers.

The overarching precedence of Universal License Terms remain in effect unless explicitly retracted or amended in either the General license Terms or Product-Specific License Terms of the Product Use Rights (see example diagram below)

The Universal License Terms

Microsoft state within the Universal License Terms, that Software Assurance (SA) is required to support re-assignment of the Windows Upgrade License and is an example of a vendor defined limitation:

“Except as permitted below, you may not reassign licenses on a short-term basis (within 90 days of the last assignment), nor may you reassign licenses for Windows desktop operating system […]”

However, Microsoft provide the following exception as provided under the Universal License Terms:

“Reassignment of Software Assurance for the Windows desktop operating system. You may reassign Software Assurance coverage for the Windows desktop operating system to a replacement device, but not on a short-term basis, and only if that replacement device is licensed for a qualifying operating system as required in the Product List; provided, however, you must remove any related desktop operating system upgrades from the former device”.

Condition on License Reassignment “When you reassign a license from one device or user to another, you must remove the software or block access from the former device or from the former user’s device”

The enablement to reassign of Windows Enterprise Edition is supported in the Product Use Rights under the condition (see above) that it is to a replacement device and the former device is retired.

“Reassignment of Software Assurance Related Rights. Licenses that are granted or acquired in connection with Software Assurance coverage (e.g., Windows Thin PC, MDOP, User SLs for Software Assurance) generally must be reassigned as and when the qualifying license and Software Assurance are reassigned”.

The Product Use Rights Appendix: Software Assurance

The Product Use Rights under the Appendix 2: Software AssuranceBenefits include an overview of the conditions and limitations of access to Windows Enterprise. Appendix 2 contains license terms that apply to Software Assurance benefits.

Microsoft are careful to set that context that “Except as noted below, these benefits expire when your Software Assurance coverage ends”.

“8. Your right to use the software as described here is non-perpetual; you may not access or use the software, as permitted here, after your Software Assurance coverage expires.

9. If you accrue a perpetual right under Software Assurance coverage to use the latest version of the Windows desktop operating system, then you will have a perpetual right to use in its place the corresponding version of Windows Enterprise, but only as permitted in the Desktop Operating System section of the Product Use Rights without the additional rights and limitations here”

Final Thoughts

• Windows Enterprise while accrued under the umbrella term Software Assurance (SA), it is not derived from New Version Rights but as a product specific Software Assurance Benefit. This is supported under the logic that Enterprise is a ‘Edition’ not a ‘Version’ of Windows and placement in the Product Use Rights under the Appendix 2: Software Assurance Benefits.

The Appendix 2: Software Assurance in the Product Use Rights is interesting, and if interpreted correctly (see extract above) establishes the limitations of use for Windows Enterprise Edition under the term “software” as follows:

• An organisation can assign and deploy Windows 7 Enterprise Edition until the end of their Software Assurance (SA) coverage.

• Deploy Windows 8 Pro – after expiration – using the benefit of “New Version Rights” i.e. “accrue a perpetual right [..] to use the latest version”

• Would not be able to deploy Windows 8 Enterprise after expiration of Software Assurance (SA) coverage.

As illustrated above, advisory documentation (likely for simplicity) rarely refer to source ‘binding’ documentation like the Product List or Product Use Rights and increasingly, it should be recognised that licensing briefs, white papers and training resources, and 3rd party commentators, while useful, are not contractually binding documentation.

Many briefs may state that they are to be used as a ‘guide only’ While often quoted by the Microsoft subsidiary to support their own view, the customer must look to the ‘binding’ terms and extrapolate how this should be interpreted, implemented and controlled. It is often the case that Non-binding advisory documentation is of limited influence unless it supports the ‘current’ view of the vendor.

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One thought on “Windows Enterprise Edition – Under Review”

Great article Tony. There are a lot of misconceptions around what is a benefit and the rights SA grant you. This is becoming more relevant as organizations will start to come under pressure to establish their migration strategy to Windows 8 especially where there is a distributed work force